Your favourite restaurant might be losing money due to slower foot traffic and rising costs, according to a new survey.
A report from Restaurants Canada out today surveyed 220 of its members in late 2025 about their restaurant businesses. The results found that 26 per cent of restaurants surveyed were operating at a loss as of November 2025, while another 18 per cent were just breaking even.
Together, that means nearly half — 44 per cent — of respondents weren’t profitable, compared to 2019 when just 12 per cent were in that same financial position.
Those figures were a little better than in 2024, however, when 53 per cent of restaurants surveyed were losing money or breaking even.
“It is a very concerning number that is going to impact jobs. It’s going to impact shifts. We’re going to see more restaurant closures,” Kelly Higginson, president and CEO of Restaurants Canada, told CBC News.
She says restaurants are struggling with rising costs across the board, on everything from food to rent to items like cutlery.
Toronto’s food scene has grown over the past decade, but some in the industry say the pool for professional chefs hasn’t kept up with the demand. CBC’s Mercedes Gaztambide spoke with restaurateurs about the decline.
In the report, food and labour costs were the two factors respondents were most concerned about — 89 per cent said they were worried about labour costs and 88 said the rising cost of food was an issue.
Inflation has had an especially big impact on food prices. In December, inflation for grocery items was up five per cent compared to the same time the year before, while that figure was at 2.4 per cent for items across the board.
‘It’s mentally exhausting’: chef
Mike von Massow, a food economist and professor at the University of Guelph, says he’s not surprised that some restaurant owners in Canada are struggling. He says the rising cost of food in particular hits them twice — both as an increase to the business’s costs and because consumers feel the pinch at the grocery store and might choose to dine out less often.
“Restaurants struggle with the fact that they compete with the grocery store,” von Massow said. “If we’re squeezed [on groceries], we go to the restaurant less, and if they increase prices to adapt to that, then they dig themselves an even deeper hole. So it’s really a difficult situation for restaurants.”
It’s a struggle Frederic Chartier is familiar with. He’s the owner and chef at Beyond the Gate, a French restaurant in Shelburne, Ont., but recently he’s been wearing a lot more hats. He’s also the dishwasher, accountant and, on slower days, a server because there aren’t enough customers spending money for him to employ more people.
“Eight years in, you wouldn’t think that it would be a problem and we’d be able to fill the place every day, and instead it’s going the opposite way,” Chartier said. “We’re surviving with dinner [service] but it’s challenging.”
Chartier says the years before the COVID-19 pandemic and immediately after were good for business, but the last few have been a struggle as fewer customers are walking through his door. He’s since cancelled his lunch and Sunday brunch service, and recently picked up a part-time job at a burger joint in Shelburne to help bring in more cash.
“It’s mentally exhausting,” Chartier said. “Up until three years ago, we had staff. It was great. I had a dishwasher every weekend. It was good, it was fun. Now it’s just work, work, work trying to get by.”
Some owners might raise prices
With such tight margins, restaurant owners surveyed said they expected to raise their prices in 2026 by four per cent on average.
Higginson at Restaurants Canada says it’s a difficult balancing act for their members, who need to cover their costs but also retain customers who might not come back if things get too pricey.
“We know Canadians are struggling with affordability. So while we might see that four per cent increase in menu prices, that definitely does not reflect the increase in operations for our businesses,” Higginson said.
Chef and owner behind Beyond The Gate in Shelburne, Ont. has cut staff and hours at the restaurant, and even picked up a part-time job in order to pay his bills. He says the changes have taken a personal toll on him.
She adds that some of their members have been trying to pull other levers and avoid raising prices, including offering value meals or high-end restaurants adding mid-level options for customers who are looking to save.
Previous surveys by Restaurants Canada have indicated that as many as three in four Canadians are going out to eat less often, in part because of the cost.
Chartier says he’s introduced price increases sparingly in the past, a dollar or two at a time, to compensate for rising costs on his end. But those additions do add up. He says a beef tenderloin that was $45 three or four years ago is now $60, even despite him taking a smaller margin.
A few years ago, Beyond the Gate introduced a three-course “recession menu” for $30 to try and attract customers looking for value options, which helped for a while before his customer base “lost interest,” Chartier said.
He hopes the government might introduce measures that would help his customers with the cost of living, so that they have more free cash for things like dinners out.
“Put more money into customers’ pockets so they can go out and spend it,” Chartier said.
A new report from Restaurants Canada found that three-quarters of Canadians are dining out less in order to save money. CBC’s Tyler Cheese has reaction from Toronto restaurant owners, who say they aren’t surprised.
The report said that restaurant owners surveyed got a bit of a break with the federal government’s GST holiday early in 2025 and from a strong summer of domestic tourism.
But Higginson hopes more help from the government might come. Her organization would like to see federal GST removed from all food, including meals served at restaurants.
“We operate [restaurants] in every single community in the country,” Higginson said, which means that when restaurants are hurting, it has a wide impact.
“You’re going to feel it in every community,” Higginson said. “You’re going to see job loss, you’re going to see shifts cut and that’s going to have a direct impact on the economy and the communities that we continue to serve.”
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